"Whether [the rate hike] was the right move or not will be
determined by wage growth," Luke Bartholomew, global
investment manager at Aberdeen Asset Management told Business
Insider. "That's the one thing that economists 20 years
from now will look back on to determine if the rate hike was
successful or not."

As it stands now, wage growth has been largely stagnant
during the recovery despite continued predictions that it would
jump. Average hourly earnings went up by 2.3%
year-over-year in
the November jobs report. That is higher than
months past but still well below pre-recession levels.

"The [Employment cost index] has been a bit stronger, and
if you look at broader measures of labor inflation and wage
growth there is some promising data," he said. "I'm not telling
you it's spectacular, but it's better than the headlines
say."

The numbers, both headline and underlying, need to improve
over time to make the case that the Fed's decision and
further rate hikes were a success, he said.

Luke
Bartholomew, investment manager at Aberdeen Asset
ManagementCNBC

The idea is that wages are tied to inflation by the
wage-price spiral. Without getting too technical, the idea is
that as wages go up prices follow, thus causing inflation.

This can be for a number of reasons, whether it be
businesses increasing prices as they have to pay more for labor
or labor demanding more to keep up with rising prices.
(Here's a
paper from MIT economics professor and former chief IMF
economist Olivier Blanchard detailing the theory, if you want dig
deeper.)

Despite the subdued increase so far, Bartholomew is bullish
on wage growth for a few reasons:

The participation rate has been hiding labor market
slack. If there's a bigger pool of available
candidates than the basic unemployment rate shows, then
employers have no need to raise wages. As that slack comes out,
the wage increases will happen.

There's anecdotal evidence it is about to
happen. Companies from the
Cheesecake Factory to
Walmart have all talked about the coming wage increases.

People are worried about asking for bonuses, but that
will fade. Bartholomew speculated that workers may
still have the
mental scars from the last recession, and simply haven't
gotten the guts to ask for more.

While he is confident, the
clear picture will only come into view as the economy adjusts to
Wednesday's hike and the further rate hikes to come.
According to Bartholomew, whether or not the picture looks good
comes down to how much wages grow.